Thursday, June 25, 2009

Procter & Gamble calls it the "First Moment of Truth" - the moment at which the shopper is confronted with your product in the store. You may have worked hard at getting the product right, pricing it correctly, advertising it to everyone, but will he or she pick it up, and if so, will he or she buy it?

Increasingly, manufacturers and retailers are studying this moment. They are carrying out research to understand what happens. What are the shopper's thoughts? What are his or her actions? Over the next decade, this will become more and more important. New technology allows much more precise and accurate measurements to be taken.

Saturday, June 20, 2009

Is choice really a consumer demand? It often over-whelms consumers, and it usually results in higher prices. Club stores and deep discounters offer little choice, yet they are the chains which are growing. Traditionally, business has thought that the consume is making a trade-off, but many consumers enjoy shopping at stores like Trader Joe or Costco. Consumers often say they want choice, but act as though it confuses them. Actually, we know that too many choices do confuse consumers and it is often deliberately used by business to get consumers to pay more than they need to.

Wednesday, June 17, 2009

I find the debate on reimbursement fascinating in that it assumes essentially the same system as the US has now. That is a fee for service system which is what resulted in the expensive and inefficient system we have now. For example, I do not see any mention of capitation fees, in which primary care doctors are paid a fee based on the number of patients who sign up with them. The fee is to keep them healthy as well as co-ordinate care provided by specialists. People tend to do what is in their personal economic best interest, and the corollary is that when a large group of people behave in the same way it means that the system rewards this behavior. I do not see any interest outside a small group of experts in taking a look at what does and does not work elsewhere, and no real knowledge so that reinventing the wheel has become a requirement.

Tuesday, June 16, 2009

People spend a lot of time arguing about whether or not there should be a single payer system or not - whether a public option is a requirement or treasonous. Yet, at a far more fundamental level, the US healthcare system is increasingly failing. The system is Balkanized, with each constituency only out for itself. The parts of the system do not work together to serve the consumer. If they made a movie about the fall of the US automotive industry, the UAW could be played by the AMA, GM Management by the insurance companies, dealers by hospitals, and parts suppliers by drug companies. The consumer would play the consumer.

Medical records are routinely lost. More money is spent denying claims and turning down health insurance applicants than providing care for many. Patients are routinely given drugs or treatments which have harmful or dangerous effects on each other. Many patients will see over ten specialists but no one has an overview of the process - doctors are incented to refer rather than to treat. There is substantial evidence that because of this, and the propensity to order unnecessary tests, the more that is spent per patient, the worse the outcome. The system rewards inefficiency and ineffectiveness. Unless something is done, it will only get worse.

The wosh for universal healthcare has existed since Teddy Roosevelt. Harry Truman ran up against the rocks trying to make it happen. Saddest of all is that no one has even been able to get efficiency and effectiveness within the existing system.

Sunday, June 14, 2009

My friend Jonathan will be comforted to know that Marketing is quite simple in principle. However, it is tougher in practice. I have come to the conclusion that good marketing runs counter to human instinct. We want to have our preconceptions confirmed by being able to sell what we think customers should want rather than finding out what they want first. The steps of good marketing are simple, but demand objectivity.

Work out what is the target market.

Find out what it wants, what it will pay, and where it wants to buy.

Design and make the product or service and ensure that it can be done for a price which maximizes demand (not always cheap in the case of luxury goods).

Ensure that it is available to the target market.

Tell people about it.

As the saying goes,"nothing kills a bad product faster than good advertising." If the product does not live up to expectations, there will be no repeat purchase and buyers will tell prospective buyers about it (even faster today with review sites, blogs and other feedback mechanisms).

Yet so often, we see companies decide that what they can make should be sold to customers and then blame the sales force or marketing department for its failure. Most senior executives these days learn the right way of marketing as much as they learn to read a P&L, yet they are regularly overwhelmed by personal hubris. Many failed products were quite predictable, but became investments in management prestige - a violation of Marketing principles!

Sunday, June 07, 2009

I have seen, inherited and continue to see companies knowingly or not, start off with a business model they will regret. Whether it is distributorships which will be ineffective and expensive to change, as GM has discovered, or prime sources of revenue which are the least profitable, as Nielsen and IRI know, it happens again and again. I see it regularly. So why?

Usually, the inferior business model is easy, cheap and fast to enter. Distributors seem to offer immediate market entry at no cost. Some customers are quick to buy than those from other sectors, but will never pay much, and by making them customers, it hurts future profit. Limited distribution seems to restrict sales potential, though it often helps profitability. Companies often start by selling data, thinking that they can add value later, though they never can. Cutting quality or service may seem like a good idea to make a sale, but you can never afford to add it back.

Friday, June 05, 2009

All too often "Sales" and "Marketing" are paired even so that one person has a "Sales & Marketing" title. This often makes as much sense as pairing Finance and R&D. Peter Drucker, whom many claimed to admire, but also most ignored pointed out that Sales and Marketing were more likely to be natural adversaries than allies. After all, as he said, if Marketing were to do a perfect job, then there would be no need for sales. Yet, even though few people are good at both, the role continues to be confused to the harm of the company.

Monday, June 01, 2009

Let's face it, as the Greeks said: "those whom the gods want humbled, they first give 40 years of prosperity!" Many companies which look successful on the outside are hollow shells. GM had the seeds of failure within it 30 years ago. Citibank, which would also be in Chapter 11 were it not for a government bailout was in the same situation. Yet a few companies, such as Apple Computer or P&G have revitalized themselves. As Jim Collins in his latest book, How the Mighty Fall, lays out five stages of failure:

Stage 1: Hubris Born of Success

Stage 2: Undisciplined Pursuit of More

Stage 3: Denial of Risk and Peril

Stage 4: Grasping for Salvation

Stage 5: Capitulation to Irrelevance or Death

In retrospect, each is capable of being reversed, yet this rarely happens. Even when warnings are loud and clear, they are rarely listened to.

Followers

About Me

Richard has grown multiple businesses, some from scratch, some already establishes, to much bigger profit and market value.

Richard has over
thirty years in leading Fortune 500 and much smaller companies to
success as a member of top management in Fortune 500 companies and adviser to
them as consultant and Board member.

Prior to
founding Max Brand Equity, Richard started his career in marketing at Procter
& Gamble, later becoming a Division Head at Mars, Inc, CMO at US West and BMC
Software as well as President of Reliant Energy. He was also a partner in two
respected consulting firms, where he advised top management of Global 2000
companies. He has been on the Board of eight highly successful companies,
including four start-ups.

Richard has
focused on initiating and leading change to achieve successful results in
global organizations in changing markets. From Consumer Packaged goods to
communications and high-tech he has created new paradigms which have changed
the market structure and built substantial revenue and profit growth.

Most recently,
Richard created the consumer “broadband” market while at US West/Comcast, the
most successful retail energy business at Reliant Energy, new “dialog-based” CRM approaches at several companies as well as BMC software, as well as pioneering in
multi-channel and direct to the consumer marketing. He grew market value of
three public corporations by several-fold in periods of around two years each.
The firm focuses on excellence in execution - Big Idea to Successful Implementation
in Seven Steps

Richard has
focused on initiating and leading change to achieve successful results in
global organizations in changing markets. From Consumer Packaged goods to
communications and high-tech he has created new paradigms which have changed
the market structure and built substantial revenue and profit growth.

Richard has
grown and led several large global organizations. Much of the success of the
organizations was built on his definition of tasks and responsibilities as well
as structure and communications. He has lived and worked in ten countries and
four continents, achieving great success in multiple markets.

He has regularly
achieved success for many companies, in multiple categories, both as a manager
and as a consultant. He is an acknowledged expert, having been a published
author and public speaker over many years, and is sought out as an interviewee
in many areas.

Richard
graduated from the University of Cambridge with a
Bachelors degree in Chemistry, Physics, and Math. He went on to earn a Masters from Cambridge
in Chemical Engineering.